Institutions and the losses from natural disasters

By Paul A. Raschky. 2008

299 citations recorded by the source corpus.

Abstract. Natural hazards can be seen as a function of a specific natural process and human (economic) activity. Whereby the bulk of literature on natural hazard management has its focus on the natural process, an increasing number of scholars is emphasizing the importance of human activity in this context. Existing literature has identified certain socio-economic factors that determine the impact of natural disasters on society. The purpose of this paper is to highlight the effects of the institutional framework that influences human behavior by setting incentives and to point out the importance of institutional vulnerability. Results from an empirical investigation of large scale natural disasters between 1984 and 2004 show that countries with better institutions experience less victims and lower economic losses from natural disasters. In addition, the results suggest a non-linear relationship between economic development and economic disaster losses. The suggestions in this paper have implications for the discussion on how to deal with the adverse effects of natural hazards and how to develop efficient adaption strategies.

Subfields: Global and Planetary Change, Sociology and Political Science, Soil Science

View Paper: https://www.semanticscholar.org/paper/b2154bf47ce53592e9d4ce3dad9bd5aa4f957a27

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Citations in the corpus

Informing Climate Adaptation: A Review of the Economic Costs of Natural Disasters, Their Determinants, and Risk Reduction Options (2012, unknown): “This is a robust finding echoed by all the follow-on studies (Stromberg 2007; Toya and Skidmore 2007; Raschky 2008; Gaiha et al. 2012).”
The economics of natural disasters in a developing country: The case of Vietnam (2010, background): “Several papers investigate the institutional and structural determinants of initial disaster costs (Anbarci, Escaleras, & Register, 2005; Kahn, 2004; Raschky, 2008; Skidmore & Toya, 2007) or of the subsequent impact on the economy (Cavallo, Galiani, Noy, & Pantano, 2009; Noy, 2009).”
Natural disasters' impact, factors of resilience and development: A meta-analysis of the macroeconomic literature (2014, background): “(Four of these studies control for disaster frequency/severity: Kahn (2005); Kellenberg & Mobarak (2008), Raschky (2008) and Rasmussen (2004).”
Hurricane Iniki: measuring the long-term economic impact of a natural disaster using synthetic control (2011, background): “2 Several other papers investigate the institutional and structural determinants of the initial costs of a disaster (Kahn, 2004; Anbarci et al., 2005; Raschky, 2008).”
Climatic natural disasters, political risk, and international trade (2010, background): “Higher income per capita and government effectiveness (Kahn, 2005; Strömberg, 2007), education attainment and trade openness (Skidmore and Toya, 2007), and government stability and better investment climate (Raschky, 2008) were found to reduce the impact.”
Economic motivation of households to undertake private precautionary measures against floods (2011, background): “…guidance ‘that nobody shall be worse off after the flood – raises recipients’ utility levels to a higher level still, U(I3), while at the same time disincentivising any precautionary efforts and any self-reliant behaviour by the population potentially affected (in the sense of Raschky, 2008).”
Economic development and losses due to natural disasters: The role of hazard exposure (2011, background): “We, first, develop a theoretical model which is a simplified version of that presented in Schumacher and Strobl (2008), where countries choose their optimal level of prevention expenditure.”